VALUE IFRS Plc - PwC
嚜燄ALUE IFRS Plc
Illustrative IFRS consolidated
financial statements
December 2019
This publication presents the sample annual financial reports of a fictional listed company, VALUE IFRS Plc. It
illustrates the financial reporting requirements that would apply to such a company under International
Financial Reporting Standards as issued at 31 May 2019. Supporting commentary is also provided. For the
purposes of this publication, VALUE IFRS Plc is listed on a fictive Stock Exchange and is the parent entity in a
consolidated entity.
VALUE IFRS Plc 2019 is for illustrative purposes only and should be used in conjunction with the relevant
financial reporting standards and any other reporting pronouncements and legislation applicable in specific
jurisdictions.
Global Accounting Consulting Services
PricewaterhouseCoopers LLP
This content is for general information purposes only, and should not be used as a substitute for
consultation with professional advisors.
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VALUE IFRS Plc
Illustrative IFRS consolidated financial statements
December 2019
Financial statements
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Statement of profit or loss
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
27
Significant changes in the current reporting period
29
How numbers are calculated
30
Segment information
Profit and loss
Balance sheet
Cash flows
31
36
52
113
Group structure
143
Business combination
Discontinued operation
Interests in other entities
Further details
Related party transactions
Share-based payments
Earnings per share
Offsetting financial assets and financial liabilities
Assets pledged as security
Accounting policies
Changes in accounting policies
Independent auditor's report
Appendices
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10
17
21
24
144
147
150
Risk
116
Critical estimates, judgements and errors
Financial risk management
Capital management
117
120
140
Unrecognised items
Contingent liabilities and contingent assets
Commitments
Events occurring after the reporting period
157
158
159
160
162
163
167
172
175
177
178
195
200
201
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Introduction
This publication presents illustrative consolidated financial statements for a fictitious listed company, VALUE IFRS Plc. The
financial statements comply with International Financial Reporting Standards (IFRS) as issued at 31 May 2019 and that
apply to financial years commencing on or after 1 January 2019.
We have attempted to create a realistic set of financial statements for VALUE IFRS Plc, a corporate entity that manufactures
goods, provides services and holds investment property. However, as this publication is a reference tool, we have not
removed any disclosures based on materiality. Instead, we have included illustrative disclosures for as many common
scenarios as possible. Please note that the amounts disclosed in this publication are purely for illustrative purposes and may
not be consistent throughout the publication.
New disclosure requirements and changes in accounting policies
Most companies will have to make changes to their disclosures in 2019, to reflect the adoption of IFRS 16 Leases. This
publication shows how the adoption of the standard may affect a corporate entity. Note 26 provides example disclosures
which explain the impact of the changes in accounting policy. The new leasing disclosures are illustrated in note 8(b) and in
note 8(c). You can find new or revised disclosures by looking for shading in the reference column.
In compiling the illustrative disclosures, we have made a number of assumptions in relation to the adoption of IFRS 16. In
particular, VALUE IFRS Plc:
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has applied the simplified transition approach and has not restated comparative information
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does not have any right-of-use assets that would meet the definition of investment property
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does not have any finance leases as lessor, and
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did not have to recognise any adjustments in relation to the assets held as lessor under operating leases.
For further specific assumptions made, please refer to the commentary to note 26.
In addition, we have added comparative information to some of the financial instruments disclosures that were new last
year and where comparatives were therefore not required (see note 7 and note 12). We have also made a few improvements
to existing disclosures.
The other amendments to standards that apply from 1 January 2019 and that are unrelated to the adoption of IFRS 16 are
primarily clarifications, see Appendix D. We have assumed that none of them required a change in VALUE IFRS Plc＊s
accounting policies. However, this assumption will not necessarily apply to all entities. Where there has been a change in
policy that has a material impact on the reported amounts, this would also need to be disclosed in note 26.
While the IASB issued a revised Conceptual Framework for Financial Reporting in March 2018 which will be used
immediately by the Board and Interpretations Committee in developing new pronouncements, preparers will only
commence referring to the new framework from 1 January 2020. We have therefore continued referring to the existing
framework in this publication.
Early adoption of standards
VALUE IFRS Plc generally adopts standards early if they clarify existing practice but do not introduce substantive changes.
These include standards issued by the IASB as part of the improvements programme or the amendments made to IAS 1 and
IAS 8 in relation to the definition of material.
As required under IFRS, the impacts of standards and interpretations that have not been early adopted and that are
expected to have a material effect on the entity are disclosed in accounting policy note 25(a). A summary of all
pronouncements relevant for annual reporting periods ending on or after 31 December 2019 is included in Appendix D. For
updates after the cut-off date for our publication, see ifrs.
Using this publication
The source for each disclosure requirement is given in the reference column. Shading in this column indicates changes made
as a result of new or revised requirements that become applicable for the first time this year. There is also commentary that
(i) explains some of the more challenging areas, (ii) lists disclosures that have not been included because they are not
relevant to VALUE IFRS Plc, and (iii) provides additional disclosure examples.
The appendices give further information about the operating and financial review (management commentary), alternative
formats for the statement of profit or loss and other comprehensive income and the statement of cash flows, and industryspecific disclosures. A summary of all standards that apply for the first time to annual reports beginning on or after 1
January 2019 is included in Appendix D, and abbreviations used in this publication are listed in Appendix E.
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As VALUE IFRS Plc is an existing preparer of IFRS consolidated financial statements, IFRS 1 First-time Adoption of
International Financial Reporting Standards does not apply. Guidance on financial statements for first-time adopters of
IFRS is available in Chapter 2 of our Manual of Accounting.
The example disclosures are not the only acceptable form of presenting financial statements. Alternative presentations may
be acceptable if they comply with the specific disclosure requirements prescribed in IFRS. Readers may find our IFRS
disclosure checklist 2019 useful to identify other disclosures that may be relevant under the circumstances but are not
illustrated in this publication.
Some of the disclosures in this publication would likely be immaterial if VALUE IFRS Plc was a ＆real life＊ company. The
purpose of this publication is to provide a broad selection of illustrative disclosures which cover most common scenarios
encountered in practice. The underlying story of the company only provides the framework for these disclosures and the
amounts disclosed are for illustration purposes only. Disclosures should not be included where they are not relevant or not
material in specific circumstances. Guidance on assessing materiality is provided in IAS 1 Presentation of Financial
Statements and the non-mandatory IFRS Practice Statement 2 Making Materiality Judgements.
Preparers of financial reports should also consider local legal and regulatory requirements which may stipulate additional
disclosures that are not illustrated in this publication.
Format
There is a general view that financial reports have become too complex and difficult to read and that financial reporting
tends to focus more on compliance than communication. At the same time, users＊ tolerance for sifting through information
to find what they need continues to decline. This has implications for the reputation of companies who fail to keep pace. A
global study confirmed this trend, with the majority of analysts stating that the quality of reporting directly influenced their
opinion of the quality of management.
To demonstrate what companies could do to make their financial report more relevant, we have ＆streamlined＊ the financial
report to reflect some of the best practices that have been emerging globally over the past few years. In particular:
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Information is organised to clearly tell the story of financial performance and make critical information more
prominent and easier to find.
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Additional information is included where it is important for an understanding of the performance of the company.
For example, we have included a summary of significant transactions and events as the first note to the financial
statements even though this is not a required disclosure.
Accounting policies that are significant and specific to the entity are disclosed along with other relevant information,
generally in the section ＆How the numbers are calculated＊. While we have still listed other accounting policies in note 25, this
is for completeness purposes. Entities should consider their own individual circumstances and only include policies that are
relevant to their financial statements.
The structure of financial reports should reflect the particular circumstances of the company and the likely priorities of its
report readers. There is no ※one size fits all§ approach and companies should engage with their investors to determine what
would be most relevant to them. The structure used in this publication is not meant to be used as a template, but to provide
you with possible ideas. It will not necessarily be suitable for all companies.
Specialised companies and industry-specific requirements
VALUE IFRS Plc does not illustrate the disclosures specifically relevant to specialised industries. However, Appendix C
provides an illustration and explanation of the disclosure requirements of IFRS 6 Exploration for and Evaluation of
Mineral Resources and IAS 41 Agriculture. Further examples of industry-specific accounting policies and other relevant
disclosures can be found in the following PwC publications:
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Illustrative IFRS financial statements 每 Investment funds
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Illustrative IFRS consolidated financial statements 每 Investment property
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Illustrative IFRS financial statements 每 Private equity funds
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IFRS 9 for banks 每 Illustrative disclosures
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Illustrative IFRS consolidated financial statements每 Insurance
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